The advice industry, and particularly institutional advice, is set to accelerate its move into the superannuation industry’s space and finally adopt full multi-channel advice models in 2016, a leading industry analyst says.
Investment Trends’ technology analyst Ian Webster says the superannuation and insurance industries have already adopted multi-channel models, but the comprehensive advice industry has lagged, remaining focused on face-to-face advice.
Webster says that will change in 2016 as the advice industry increasingly opens up new channels for the public to access services, including online advice, call centres and even high-street presences.
“This year we will really start to see some of that [shift to multi-channel] in the planning industry,” he says. “We will start to see things that look different from the face-to-face comprehensive business model.”
Webster says that three to four years after the introduction of the Future of Financial Advice (FoFA) laws, the financial planning industry is finally developing models that fit comfortable with the new regulations.
“We’re entering a period of enormous change over the next five years which is really just the result of FoFA,” he says, adding that a stated aim of the regulations was to improve Australians’ access to advice.
Meet in the middle
The shift in the advice industry’s approaches comes as superannuation funds move towards a focus on self-directed super account services, and advice around pre- and post-retirement issues for members. Webster says these changes mean the comprehensive advice and superannuation industries will effectively “meet in the middle”.
“Institutional advice is moving downmarket, and super funds are moving upmarket to address needs for Australians with mid-level balances,” he says.
But the shift also creates opportunities for the planning industry, with many super funds striking alliances with advisers to provide face-to-face advice to members.
Webster’s comments follow the release of Investment Trends’ 2015 Member Engagement Report, which surveyed the services that 44 of Australia’s largest superannuation funds provide their members.
The report identified a number of trends, including super funds offering more self-directed super account services. Super funds are also ramping up support for members around retirement.
Webster says that super funds are shifting away from just a collective custodial stance, where they were focussed on trying to get the best investment performance for all members.
Instead, technology has allowed them to provide collective benefits, but to also give members a greater say and control in the operation of their own super accounts.
New benchmark for super
Webster says Deloitte Digital’s rebuild of QSuper’s online channel set a new benchmark for core super account services, with account-based, self-directed, intra-fund advice from Decimal.
“Digital is providing funds with the ability to deliver cost-effective member engagement strategies with a focus on individual members’ relationship with their fund and their super account,” Webster says.
The other major trend is the increasing focus on delivering retirement solutions.
Webster says the comprehensive advice industry only really deals with pre-retirement. “Retirement is very different to pre-retirement,” Webster says. “Retirement is going to become a very active area for advice services.”
Webster says super funds are moving their traditional focus on pre-retirement adequacy to the services their members will need at-retirement and post-retirement.
VicSuper, EquipSuper and Australian Catholic Super are among the first funds to introduce a retirement incomes proposition for their members, supported by new products and an options-based approach to retirement advice.
Conexus Financial’s Post Retirement Conference 2016 will be taking place at the Ivy Ballroom on March 9-10. To register click here.